The Relationship between Tax Transparency, Trust and Taxpayers’ Voluntary Compliance in Tanzania

Tanzania applies a self-assessed taxing system that implies on taxpayers’ voluntary compliance. Taxpayers’ voluntary compliance is a difficult aspects issue and its exploration needs the use of a diversity of approaches and data sources. Increasing taxpayers’ voluntary compliance level is a significant objective of any government, aiming to reduce the tax collection costs. This article addresses the relationship between tax transparency, trust and taxpayers’ voluntary compliance in Tanzania. This study adopted a survey cross sectional research design with a population of 12,670 SMEs Taxpayers’. The sample size of the study comprises Ninety nine (99) SMEs taxpayers working in business industries. The finding of the study indicated the presence of a direct relationship between tax transparency and taxpayers’ voluntary compliance through trust with P- Value 0.007. Therefore in order to increase the taxpayers’ voluntary tax compliance; tax officers and taxpayers’ must increase the level of tax transparency. The study recommended that, tax authorities should invest in transparency strategies for both taxpayers and tax officials in order to improve voluntary tax compliance.